July 29 (Bloomberg) -- Bill Barrett Corp. won U.S. approval to explore for natural gas in Utah’s West Tavaputs Plateau after agreeing to use new drilling technology that reduces the impact on sensitive lands. The shares rose the most in 16 months.
The Bureau of Land Management decision follows an agreement between Bill Barrett and the Southern Utah Wilderness Alliance, a Salt Lake City-based environmental group, the bureau said today in a statement. The alliance had opposed drilling, saying in 2008 the plan would destroy “one of the most remote and primitive areas of the State of Utah.”
Negotiations led to an agreement last year in which Denver-based Bill Barrett would use six drilling pads in areas designated as wilderness-quality landscapes, down from 225, said Steve Bloch, a lawyer for the alliance.
“We negotiated for more than a year to try to reach that happy medium which would protect the wilderness resources here, the Desolation Canyon, while still allowing Barrett to do its business,” Bloch said in an interview. The area “is one of the most remarkable, remote landscapes in the lower 48 states.”
The gas field about 110 miles (177 kilometers) southeast of Salt Lake City holds the equivalent of about 324 billion cubic feet of proved and 1.3 trillion cubic feet equivalent of proved, probable and possible natural gas reserves in Utah, the company said in a statement. The U.S. decision begins a 30-day period during which appeals can be filed, and the timing of drilling permits depends on the nature of any appeals, the company said.
“This is an important asset in our portfolio,” Chief Executive Officer Fred Barrett said in the statement.
Bill Barrett will reduce the number of well sites on the surface by drilling horizontally to reach gas deposits, Bloch said.
The company agreed not to build new well pads in the Jack and Desolation Canyon Wilderness Study Area, the Bureau of Land Management said in a posting in the Federal Register.
The agreement “provides for the orderly and balanced development of our nation’s energy supply while, at the same time, serving as an outstanding example of the fresh look of how we can better manage our energy resources,” Interior Secretary Ken Salazar said in a statement. “It improves protections for air, land, water, and cultural resources, while reducing potential conflicts that can lead to costly and time-consuming litigation.”
Bill Barrett rose $2.80, or 8.7 percent, to $34.91 at 4 p.m. in New York Stock Exchange composite trading, after touching $35.77.
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